The Federal Government’s Coronavirus stimulus package received Royal Ascent on 24 March 2020 and is now law.
Small Business Loans Relief Package
Australian banks will provide support to eligible small businesses by deferring loan payments for up to six months, where assistance is required as a result of COVID-19. The intention is for banks to implement this as soon as possible. If you haven’t yet been contacted by your bank you should phone them to discuss your options.
Coronavirus Loan Guarantee Scheme
The Coronavirus Guarantee Scheme will provide a Government guarantee of 50% of the value of new loans issued by eligible lenders to small and medium sized businesses. The intention of this measure is to increase access to loans by businesses impacted by the Coronavirus.
Additional Lump Sum Payments To Employers
Small and medium sized businesses and not-for-profit organisations (with turnover of less than $50m) that employ people will receive payments of between $20,000 and $100,000 to assist with operating expenses.
The amount will be made available in two instalments.
The amount of payment depends on whether your business is required to withhold tax on salary and wages for employees. If you don’t have employees, you won’t be eligible for these payments.
Where you’re required to withhold tax on salary and wages for employees, you’ll be entitled to an initial amount equal to 100% of the amount of tax withheld (up to a maximum of $50,000). Where you don’t actually withhold any tax, because for example, your employees earn amounts below the tax free threshold, you will still qualify for the minimum payment of $10,000.
The second payment will be the same amount as the first payment, without any recalculation.
The payments will be tax free and received as a credit on the business’ activity statements by the ATO from 28 April 2020. The timing of the credit will vary depending on the required frequency of lodgement of activity statements (eg monthly or quarterly). All eligible businesses will receive a first payment of at least $10,000.
Where this puts your business is a refund position, these amounts will be paid to you by the ATO within 14 days.
Increased Instant Asset Write-Off
From 12 March 2020, the instant write-off threshold will increase from $30,000 to $150,000. It has also been broadened and will be available to businesses with an annual turnover of up to $500 million for the current financial year (an increase from $50 million). This applies to new or second-hand assets used or installed ready for use by 30 June 2020. The increased write-off threshold will apply on a per asset basis until 30 June 2020.
Accelerated Depreciation For Assets Purchased Before 30 June 2021
Accelerated depreciation of 50% will apply to eligible assets until 30 June 2021. Eligible assets are those acquired after the announcement and are used or installed ready for use by 30 June 2020.
However, it does not apply to second-hand assets, building or other capital works deductible under separate tax provisions.
This concession will be available to business with aggregated turnover of less than $500 million.
Employers With Apprentices and Trainees
If you’re an eligible employer who employs apprentices or trainees, you can apply for a subsidy of 50% of the employee’s wage. This applies for the period of 1 January – 30 September 2020. The maximum payment is $21,000 per apprentice or trainee.
If you’re unable to retain an apprentice, the subsidy will be available to the new employer.
To be classified as an eligible employer, you must have less than 20 full-time employees. The apprentice or trainee must be in employment with a small business as at 1 March 2020.
Other employers, regardless of size, and Group Training Organisations that re-engage eligible out-of-trade apprentices or trainees are also eligible for the subsidy.
Eligible employers can register for the subsidy from early April 2020 and final claims for payments lodged by 31 December 2020.
For more specific detail about each of these opportunities, read more at: https://treasury.gov.au/coronavirus/businesses